Scottish airline group Loganair has posted a 24% hike in profits after cutting loss-making flights from Dundee Airport from its schedules.
The firm, which specialises in “lifeline” services to the remote Highlands and Islands, said it had tried everything it could to maintain the Flybe-branded links between the city and Belfast and Birmingham, but was forced to pull them late last year after “significant” losses.
Results for the year to March show pre-tax profits of £4.36 million, following a 20% increase in turnover to £87m.
Executive chairman David Harrison said his firm’s Dundee-based offering had struggling to compete with the range of services on offer from Edinburgh.
“The trouble we had was always really in having enough passengers from Dundee to make services viable there,” he said.
“There is a market in Dundee for people who want to travel on business, but unfortunately there isn’t enough of one to fill the aircraft day-to-day at the price we need to make services attractive.
“When people can get low-cost flights from Edinburgh to such a wide range of destinations it does make things difficult.
“We tried all the things we could try but, despite everything, we just couldn’t make it work.”
He said the economics of the modern aviation industry demand planes fly all day: an impractical proposal for the limited route craft which had been based at Dundee.
“It’s something we did with great reluctance, because we’re aware it wasn’t good news for Dundee to lose those services,” Mr Harrison added.
“But in running the service in Dundee, we were not covering the costs and it wasn’t just by a small amount, it was a significant shortfall.”
The company nonetheless retains a significant presence in Dundee following its 2011 acquisition of Suckling Airways, employing 23 as pilots, cabin crew and engineers.
Staff supply and service craft for CityJet’s Dundee to London City route on a contract basis, but also repair planes from other Loganair routes.
Mr Harrison said he was encouraged by his debt-free firm’s continued good trading in the new financial year which includes strengthening passenger numbers on subsidy-supported remote services, tender extensions, and increasing charter and North Sea work allowing greater focus on opportunities in Aberdeen’s oil and gas sector.
“It’s not been an easy time for the aviation industry, so it’s good to have a success story like Loganair which has been consistently profitable,” he told The Courier.
“We’re seeing a rising trend again, and we’re certainly very pleased because it ensures that the company is continuing to go from strength to strength.”
Routes linking Norwich to Manchester and Glasgow to Leeds have been added to the company’s operations, while capacity on the Aberdeen to Sumburgh route will be increased by more than 50% following the purchase of three new 50-seater Saab 2000s aircraft.
Chief executive Stewart Adams has joined from Singapore’s Tiger Airways, while new chief operating officer Phil Preston has moved to the group from ferry operator CalMac.
Meanwhile, the shareholding of former chairman Scott Grier, who retired last September after 36 years with the company, has been acquired by brothers Stephen and Peter Bond.
The deal sees Stephen Bond, who was an investor when Grier led a management buyout from the British Midland Group in 1997, increase his interest in the firm.